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Inventories and the Propagation of Sectoral Shocks

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  • Cooper, Russell
  • Haltiwanger, John

Abstract

This paper contrasts the dynamic properties of an imperfectly competitive economy with a representative agent, real business cycle model. For both economies, inventories are the important dynamic linkage. The predictions of these models with regards to the comovement of employment across sectors may differ. Empirical evidence on the comovement of employment over the business cycle is consistent with the model of imperfect competition with inventory holdings. Copyright 1990 by American Economic Association.

Suggested Citation

  • Cooper, Russell & Haltiwanger, John, 1990. "Inventories and the Propagation of Sectoral Shocks," American Economic Review, American Economic Association, vol. 80(1), pages 170-190, March.
    • Handle: RePEc:aea:aecrev:v:80:y:1990:i:1:p:170-90
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    1. Russell Cooper, 1987. "Dynamic Behavior of Imperfectly Competitive Economies with Multiple Equilibria," NBER Working Papers 2388, National Bureau of Economic Research, Inc.
    2. Mark Dynarski & Steven M. Sheffrin, 1987. "Consumption and Unemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 411-428.
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